Regulators close Florida bank in third failure of 2020

First City Bank of Florida in Fort Walton Beach was closed by state regulators late Friday, the third failure of the year and the first since April.

The $134.7 million-asset bank had suffered “longstanding capital and asset quality issues” that were unrelated to the recent economic fallout from the COVID-19 pandemic, the Federal Deposit Insurance Corp. said in a press release.

The FDIC said the $1.2 billion-asset United Fidelity Bank in Evansville, Ind., will acquire the failed bank’s operations, including roughly all of its assets. The buyer also agreed to assume all of First City Bank’s $131.4 million of deposits. United Fidelity has acquired four other failed banks since 2014, according to the FDIC.

The failure is estimated to cost the Deposit Insurance Fund $10 million.

The bank’s closing was the industry’s first failure since regulators closed the $152 billion-asset First State Bank in Barboursville, W.Va., on April 3. First State was acquired by the $2.2 billion-asset MVB Bank in Fairmont, W.Va.

First City Bank had lost more than $3 million since 2017 and had not turned an annual profit since 2016, according to FDIC data. Founded in 1948, it is the first institution to be shuttered in the Sunshine State since 2015.

First City had blamed much of its troubles on the 2008 financial crisis and damage caused by the Deepwater Horizon oil spill.

First City Bank tried to sell itself through a bankruptcy process earlier this year. It had an agreement to be sold to Beach Community Bank, which is also based in Fort Walton Beach, but the deal fell through at the onset of the coronavirus pandemic.